USA > Pennsylvania > The Register of Pennsylvania : devoted to the preservation of facts and documents and every other kind of useful information respecting the state of Pennsylvania, Vol. IX > Part 37
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It is likewise manifest that the company in transfer- ring the right of lottery, considered that they were only disposing of what they could do themselves and nothing more-that they were selling to their assignee to raise what they might have raised themselves, and that they, as between them and the commonwealth, were to credit the fund to be raised with what was raised by their as- signees-that if the assignees raised the money, it was the same as respected the exhaustion of the privileges, as if they had raised it themselves. We can give no other construction to the terms in their contracts with Allen and M'Intyre of selling "the right, privilege and authority to raise by way of lottery in the state of Penn- sylvania, so much of the sum of money which, by the said act of Assembly, it is permitted to the soid company to raise by way uf lottery," &c. These words can re- ceive no other construction than that, as soon as the money authorized to be raised, was raised by their as- signee, the privilege was exhausted. To show then that there were raised more than the one hundred and thirty-six thousand, two hundred and fifty dollars at the date of the act of twenty-sixth April, eighteen hundred and twenty-one, of the three hundred and forty thousand dollars, and to explain satisfactorily to the house their mode of computing the true amount raised under the whole privilege, the committee will state the grounds on which their estimates are made.
Though the company most probably are chargeable with the gross amount, the committee will take the pro- fits of the lotteries drawn under their auspicies to be the fifteen per cent. upon the scheme prices of the tickets, deducting a reasonable sum for expenses. For instance, in the third class of the present year, which is now projecting, notwithstanding this procedure, there are twenty-four thousand eight huudred and four tickets, which at the scheme price of four dollars each ticket, is ninety-nine thousand two hundred and sixteen dollars. This sum is the aggregate of all the prizes in that scheme, and when they are drawn, the broker claims a deduction of fifteen per cent. upon each prize. Hle therefore, upon this scheme, will retain from the whole amount of prizes fourteen thousand eight hun- dred and eighty-two dollars and forty cents, being fif- teen per cent. upon the scheme price of tickets. This estimate of the profit of the broker, is much below his actual receipts from the lottery; for the tickets are gen-
erally sold atan advance of fifteen per cent, or four dol- lars and sixty cents to country dealers, who dispose of them for the most part at five dollars, or an advance of twenty-five per cent. The gross profit of the lottery is therefore at least the fifteen per cent. upon the scheme price of the tickets, which seems to have been a uniform per centage adopted through all the contracts of the company, and during their own exercise of the privilege. It is unnecessary to go into any statement of the actual profits and the imposition practised to in- crease them, and it is enough for the purpose of the ar- gument to take what they will gladly admit to be a fa- vourable estimate.
It was alleged, however, that this estimate of fifteen per cent. of gross profit would be occasionally too high, as losses were sometimes sustained by the fraud or fail- ure of agents, and by Mr. M'Intyre's being often obliged to draw his lotteries when not more than three-fifths of the tickets were disposed of. But if the commonwealth were to look into such objections, the inquiry would be endless. It is plain that if Mr. M'Intyre sells or entrusts his tickets to faithless or incompetent persons, the state don't stand guarantee for their honesty or capacity to pay. He entrusts them for his own benefit, and rung the risk for the hope of the profit. And again, if he draws his lotteries before his tickets are fully disposed of, he does so on the day fixed, because it is to his ad- vantage to be punctual, expecting with the tickets skil- fully reserved to draw a competent portion of the prizes. If deduction for such deficiencies, if any ex- ist, were to be admitted, Mr. M'Intyre would be fairly liable to account for prizes drawn by unsold tickets, and the commonwealth would thus become a partneri n the very business it is her interest to suppress. He is an adventurer in the lottery to the extent of the tickets on hand at the time of the drawing; a purchaser of the unsold tickets.
The fifteen per cent. deducted from the prizes being therefore the true estimate of the gross profits, our next inquiry is, what is a reasonable deduction for ex- penses of the lotteries? Though the committee are sa- tisfied that five per cent. is an ample, and more than ample allowance, they are willing in their estimates, to make a deduction of that amount for expenses; and to charge only ten per cent. upon the scheme prices, as the " nett proceeds of the lotteries." They might, from facts and reasoning, into which they have no disposition to enter, show that five per cent. is a more than generous deduction, especially since the in- troduction of the new contrivance of chances. But they merely refer to one of Mr. M'Intyre's own con- tracts, that of eighteen hundred and twenty-one, to show that he then agrees to pay the company eleven per cent. considering the four per cent. (the difference be- tween the eleven and the fifteen,) as sufficient not only to defray the expenses, but to renumerate him for all his risk, calculating probably on the additional sum for which he would be able to sell his tickets over the scheme prices.
Assuming therefore, that the gross profit of the lot- tery is fifteen per cent. and that five per cent. is a fair deduction for expenses, the committee will proceed to show what was remaining undrawn of the three hundred and forty thousand dollars, at thepassage of the actofjeigh- teen hundred and twenty-one, and how much has been drawn since, so as to satisfy the House, that the compa- ny and their assignees have most widely exceeded their privileges, and trespassed upon the patience of the pub- lic.
From the statement number one, furnished by the company, pursuant to a resolution of the House, it ap- pears that from eighteen hundred and eleven, till eigh- teen hundred and twenty-one, the amount of the scheme prices of the nine classes which had been drawn in that period, was three million and sixty-eight thousand dol- lars. If we allow ten per cent. which is the fifteen per I cent. gross profit, deducting five for expenses, we have
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three hundred and six thousand eight hundred dollars, which deducted from the three hundred and forty thou- sand dollars, leaves thirty-three thousand, two hundred dollars, as the balance of the old sum unraised, when the act of eighteen hundred and twenty-one was passed; which with the sum of seventy thousand five hundred and one dollars and fifty-seven cents, then in the trea- sury of the company, admitted to be received from the lottery grants, would make the sum of one hundred and three thousand seven hundred and one dollars and fifty- seven cents, applicable by the directions of the acts of eighteen hundred and nineteen, and eighteen hundred and twenty-one, to the payment of the six per cent. to the new subscribers. We say new subscribers, for the act of eighteen hundred and twenty-one, suspends the pledge of the avails of the lottery to pay the old stock- holders, until the completion of the canal: which after all that was said of it in eighteen hundred and twenty- seven, can only be considered as finally achieved du- ring the last year.
Any claim of six per cent. upon the unforfeited shares, from the proceeds of the lottery, is inadmissible. The o'd lottery fund was, it is true, by the act of eighteen hundred and nineteen, pledged to pay as well the old as the new subscribers, whenever the new subscrip- tion should be made, but that pledge could not attach until after the act of eighteen hundred and twenty-one, as the new subscription only took place then, and by that act, the application of the old lottery grant, to pay six per cent. to the old stockholders, was expressly sus- pended until after the canal should be completed, and as, on the construction the committee have adopted, it was applicable by the act of eighteen hundred and twenty-one, to pay the new subscribers, it was exhaust- ed before it could be applied to pay the unforfeited shares by the payment of the six per cent. to the new subscription. To say that any portion of the funds to be raised under the act of eighteen hundred and twenty- one, was to be applied to the old stock, is against its positive words.
We come now to another item in the estimate of the company; the right to raise, under the act of eighteen hundred and twenty-one, the sum of twenty-seven thou- sand dollars per annum, to pay the new subscribers six per cent. on the four hundred and fifty thousand dollars.
But as the committee are decidedly of opinion, that it was not intended to give the company a distinct grant, but that the proceeds of the old lottery, as far as they would go, were first to be applied to pay the six per cent. to the new subscribers, and exhausted in such payments, before the power to continue the lotteries be- yond the three hundred and forty thousand dollars should he resorted to, they will/ proceed to give their reasons for this construction. The proper understand- ing of the privileges conferred by this act of eighteen hundred and twenty-one, is of peculiar importance, as the company will have exceeded their authority, even upon their own construction, (that the money received by them fram the proceeds of the sales, is the money riaised by way of lottery.) if there are not two distinct powers of raising money recognized in it.
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some subsequent clause of the same act. The use of the past tense here, must necessarily refer to some prior act, there being no phrase qualifying its usual import. If it had allusion to a new grant, to any other than the old lottery, the language "hereby granted," would have been used, or the words "hereafter granted," or "in- tended to be granted."
The committee after the most patient examination of the act, are decidedly of opinion that the true meaning of it is, "That if the proceeds of the lottery which had heen heretofore granted, will not with the aid of the tolls pay six per cent. on the four hundred and fifty thousand dollars, which may be subscribed by new sub- scribers, agreeably to the act of eighteen hundred and nineteen, any deficiency which may arise in any year for twenty-five years, shall be paid out of the public treasury, and if the proceeds of the old lottery should not be sufficient to aid the tolls throughout that period to pay the said six per cent. and also six per cent. upon the old stock, after the canal is completed, you are by this act authorized to continue to raise, by way of lottery, "what may be wanted for the purpose of paying six per cent. to the holders of said stock" during the twen- ty-five years. But if the tolls in any one year should be adequate to the payment of six per cent. to the stock- holders, you must cease to draw lotteries during such year, except as authorized by the act of eighteen hundred and eleven, and seventeen hundred and ninety-five, un- der which you may proceed as speedily as you please to draw any balance, be the tolls ever so productive -- and if there should be any excess overdrawn beyond what may he wanted as aforesaid, during that year, to pay with the tolls the six per cent. it must be applied to aid the tolls the following year, and thereby lessen the ne- cessity of drawing, in any one year, more than "may be wanted." Thus the act of eighteen hundred and twen- ty-one, though it manifestly designs to extend this per- nicious system of finance no further than was absolutely necessary to protect the public treasury; yet it does not mean to interfere with the privilege of the company to raise, or to dispose of the right to raise the balance of the three hundred and forty thousand dollars, under any circumstances, and as soon as they may please.
Upon a careful consideration of the act, this con- struction seems to the committee too manifest to be questioned. The provisions of this law were much dis- cussed, and as the view which the committee have ta- ken of it, will be conclusive of the right of the compa- ny upon their own principles of estimating the sums which have been raised, the committee take the liberty of pressing some further arguments upon the indul- gence of the House, in aid of their conclusions.
Thus, when the section alludes, as already stated, to the old privilege, it uses the phrase " if the proceeds of the lottery granted," meaning that had been granted; but when it grants the power "to continue" the lottery privilege beyond the balance of the three hundred and forty thousand dollars, it uses the terms "hereby au- thorized." When the act gives the additional privilege of continuing the lottery powers, it says: " The presi- dent and managers of the said company shall be, and they are hereby authorized to continue, during the said term of twenty-five years, to raise, by way of lottery, any sums that may be wanted, for the purpose of paying to the holders of the said stock the six per cent. as afore- said."
The language of the first part of the section is, "that if the proceeds of the lottery granted to the Union Ca- nal company, together with the tolls which may be col- lected," &c. shall not, for twenty-five years, yield six per cent. to the new subscribers, &c. What lottery is This is the first clause alluding to any grant given by this act, and if " the lottery" mentioned in the first part of the section as "granted," was not the old lottery, hut a new and distinct grant, to raise six per cent. on the new subscription, if this power to "continue, &c." is the same as "the lottery granted," why again repeat the authority to exercise it. If there had been confer- red a new lottery grant whose proceeds, with the tolls, were at once applicable to the payment of the six per cent., why, for the first time here, designate its limits here alluded to as "granted?" To one that had been already granted, or as thereby granted? The lottery that had been granted was to raise the balance of the three hundred and forty thousand dollars. The act of eighteen hundred and twenty-one, speaks not of a.new grant just then about to be conferred, but uses the past participle, as designating something done before. As the clause quoted could not have reference to a lottery described in any prior part of the act itself, it must have alluded to one granted either by some former act, or | and direct anew the application of its proceeds. But
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suppose this clause should be struck out of the act, can it be pretended that a new power was conferred by the clause preceding? It is too manifest that if the compa- ny rested on the first part of the section for their power to raise more than the balance of the three hundred and forty thousand dollars, they would have long ago re- sorted to the public treasury to relieve the " disability" of the tolls and the lottery proceeds to make the six per cent. It is the clause above quoted, and that only, which gives any additional privilege, refers to any new grant. We must take the enactment then altogether, and if we do so, we find the limits of the new privilege specifically defined, and only to be resorted to "for sums that may be wanted." There are bounds put to this continuing right that are not set to the old one. This power of continuance is to be used only under a certain state of things, the first one under any.
By this clause the company arc "authorized to contin- ue to raise by way of lottery," &c. Now can the right of continuance be construed to mean something new and distinct from what it was a continuance of? Does not continue mean to pursue something commenced? A man continues his walk, or his habits, his business or his dissipation, and in doing so, he goes on in the old way. He is but proceeding with what he had com- meneed. The power to continue don't mean that the company should begin afresh, but that they might pro- ceed with and extend what they had been drudging at for five and twenty years.
when the very clause giving the power to continue to raise the sums wanted, was only to be exercised at all when the contingencies of such proceeds being insuffi- cient, should arise. But should we still hesitate to de- cide whether the proceeds of " the lottery," alluded to in the first part, of the act as auxiliary to the tolls in the payment of the six per cent., we need raise our eye a few lines above the clause which has been quoted at length, to satisfy ourselves that it is the proceeds of the lottery of eighteen hundred and eleven. Can we entertain any doubt that the proceeds of the old lottery must come in aid of the tolls when we connect what has been said with the irrefragable evidence of these prior words of the act-" And in order to avoid as far as possible all disability to pay such interest, so much of the third section of the act aforesaid, as pledges any portion of the moneys or nett profits of the lottery afore- said, to the payment of the holders of shares not for- feited in the late Delaware and Schuylkill, and Schuyl- kill and Susquehanna canal companies, be, and the same is hereby suspended until the canal shall be com- pleted, &c." The "lottery aforesaid" is of course "the lottery" spoken of in the first part of the section, there being no other to which the word "aforesaid" would apply. The lottery, the proceeds of which were to aid the tolls in payment of the six per cent. to the new subscribers, is the only one referred to by the word "aforesaid." It is then "the lottery granted," which is pledged by "the act aforesaid." When we come to examine what act "aforesaid" it is, that pledges the avails and nett proceeds of " the lottery aforesaid" to the un- forfeited shares, we find the only act alluded to by the phrase "the act aforesaid," to be the act of eighteen hundred and nineteen, cited in the first few lines of the section. That of eighteen hundred and nineteen was the act which pledged the avails and proceeds of the lottery to pay six per cent. to the old stockholders. Now when this act of eigliteen hundred and twenty-one uses the terms " the lottery granted," as the lottery. the proceeds of which were to aid the tolls to pay the six per cent, and afterwards to designate that lottery, points to it as the lottery which had been pledged by an act passed two years before, can it be possible that it is a new lottery grant first conferred by, and owing its existence to the very act which speaks of it as having existed two years, aye, six and twenty years before its passage?
For what purpose were these sums to be raised by the continuance of the lottery "wanted?" Was it to pay the interest on the stock at all events, under every circumstance? No; but "for the purpose of paying to the holders of said stock the six per cent. as aforesaid." Paying six per cent, "as aforesaid," means in the man- ner before specified. How then had the six per cent. been directed in the previous part of the section to be paid> out of what fund? Why, from "the proceeds of the lottery granted and the tolls which may be collect- ed." Then surely as long as the lottery proceeds or the tolls were competent to pay the six per cent., no sum could "be wanted" from the additional source -there would be no need of the exercise of the contin- uing power. There were two contingencies under which this new power could alone be brought into ac- tion; the failure of the lottery, and the failure of the tolls to pay the six per cent. Now those who construe the act of eighteen hundred and twenty-one, as conferring If then, "the lottery" in the first part of the first sec- tion of the act of eighteen hundred and twenty-one is the lottery, the proceeds of which were pledged by the third section of the act of eighteen hundred and nine- teen, it is clear as the noonday sun, that it is the pro- ceeds of the old lottery to raise the balance of the three hundred and forty thousand dollars, that are to be the first appropriated under the provisions of the act of eighteen hundred and twenty-one, to aid the tolls in pay- ing the interest on the new subscription, before resort can be had to the power to continue the lotteries, if any sums should be wanted to aid the tolls and the pro- ceeds of the lottery granted in paying such six per cent. a new and distinct grant, wholly applicable to the pay- ment of the six per cent. and unconnected with the old one, must confine themselves to one contingency alone -that of the failure of the tolls: for if it were not the proceeds of the old lottery that was to aid the tolls, the new lottery would be always in requisition, whenever there were a deficiency of tolls to pay the six per cent. But the first part of the act expressly says, that the six per cent. to new subscribers was payable primarily out of "the proceeds of the lottery, and the tolls which may be collected," and the latter clause says that no new privilege is conferred, except "to raise any sums that may be wanted to pay the six per cent. as afore- To get clear of this obvious direction of thic act, it would do to say that the lottery designated under the phrase " the lottery granted," in the act of cighteen hundred and twenty-one, is not the lottery authorized by the acts of eighteen hundred and eleven, and seven- teen hundred and ninety-five, because such construc- tion would impair the right of the free disposal of the bounty and would give a new direction of the former pledge of its proceeds, when it is so plainly pointed out as not to be misunderstood. We should recollect that the pledge of the proceeds of the lottery to the payment of six per cent. to the stockholders, by the third section of the act of eighteen hundred and nineteen, was a benefit, the enjoyment of which they might fore- go; a bounty which for their own advantage they could appropriate to the payment of interest upon loans or said." So there must liave been two wants before the continuing power could be used-that of the deficiency of the lottery proceeds, and the deficiency of the tolls collected. When in the prior portion of the section, " the proceeds of the lottery" are referred to as appli- cable to the payment of the six per cent. what lottery is designated? If it were the lottery granted by the act of eighteen hundred and twenty-one, as is contended for by the company, then it would have been enough to have referred to the disability of the tolls alone to pro- duce the circumstances under which the power of con- tinuing to raise money by lottery was cxereisable. It would be absurd to say, if the proceeds of the lottery granted by this act, or the tolls collected should be in- sufficient to pay the six per cent., that then what sums should be wanted should be continued to be raised; | any other legitimate object. The operation was but
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taking the money out of their six per cent. pocket, to put it into the pocket to which their loan holders would make application for their interest. But in fact this pledge was only partially suspended-only as respects the old share holders, and left in full force as relates to the new subscribers.
But the committee respectfully to those who may dif- fer from them, intimate that the pledge to the old share holders never took effect till after the act of eighteen hundred and twenty-one; as it was given on the condi- tion that the new stock of twenty-five hundred should be first subscribed, which in fact was not done when that act passed. The act of eighteen hundred and twenty-one suspended not the pledge, for that had not attached, but "so much of the third section of the act of eighteen hundred and ninetcen, as pledges any por- tion of the avails or nett proceeds of the lottery," to pay six per cent. to the old stock till after the com- pletion of the canal.
The act of eighteen hundred and twenty-one seems to have been intended as a recognition and re-enact- ment of the old lottery privilege, preserving the pledge of its proceeds as directed by the act of eighteen hun- dred and nineteen, except the temporary suspension affecting the old stockholders and giving as already stated, a new power to continue to raise from the sums as may be necessary to meet the purposes set forth. That the act of eighteen hundred and twenty-one in- tended to re-enact and sanction the drawing of the ba- lance of the three hundred and forty thousand dollars, as the act of eighteen hundred and eleven, had the ba- lance of the four hundred thousand dollars, and to em- brace the old right and the power of continuance, both within its provisions; the committee conceive to be strongly implied by the terms of the proviso. This part of the act is in these words: "Provided, that whenever the nett proceeds of the tolls shall amount to the said six per cent., the privilege hereby granted of rais- ing money by lottery, shall during such time be sus- pended, except so far as is authorized by existing laws."
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